Bidding Strategies for Simultaneous Ascending Auctions

Simultaneous ascending auctions present agents with various strategic problems, depending on preference structure. As long as bids represent non-repudiable offers, submitting non-contingent bids to separate auctions entails an exposure problem: bidding to acquire a bundle risks the possibility of obtaining an undesired subset of the goods. With multiple goods (or units of a homogeneous good) bidders also need to account for own-price effects. Auction theory does not provide analytic solutions for optimal bidding strategies in the face of these problems. We present a new family of decision-theoretic bidding strategies that use probabilistic predictions of final prices: self-confirming price distribution prediction strategies. Bidding based on these is provably not optimal in general. But evidence using empirical game-theoretic methods we developed indicates the strategy is quite effective compared to other known methods when preferences exhibit complementarities. When preferences exhibit substitutability, simpler demand-reduction strategies address the own-price effect problem more directly and perform better.